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Bavarian Merger Bavarian Brew Is Planning on Acquiring Bavarian Sausage in a in a Pure

Question 26

Multiple Choice

Bavarian Merger
Bavarian Brew is planning on acquiring Bavarian Sausage in a pure exchange merger. Bavarian Brew’s stock is currently trading at $35 and they set the exchange ratio at 0.80. Bavarian Sausage has 75 million shares outstanding which are currently trading at $18 a share.

-Refer to Bavarian Merger.If you owned 250 shares of Bavarian Sausage what would be the value of your stock holdings after the merger?


A) $3,600
B) $4,500
C) $7,000
D) $8,750

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